Michael McKenna – Allegations of corruption against East Timor's Government were largely unfounded and based on rumour, according to its Foreign Minister, Jose Ramos Horta.

Speaking yesterday at a UN-sponsored conference in Brisbane, Mr Ramos Horta dismissed concerns raised in a World Bank report last month about "governance and corruption problems" in the higher echelons of the fledgling nation.

Mr Ramos Horta said that while bribes were still demanded in the private sector of the developing economy, a similar culture in government was impossible because of safeguards introduced since independence in May 2002.

More than 100 independent investigations were launched in the past year into allegations of government corruption, he said, but evidence of criminal activity was found in only three cases. They were now being prosecuted in the courts.

"What happens in East Timor, there is a lot of rumours, innuendos and allegations thrown around by individuals with no basis," he said.

"At the highest level of government, the system is foolproof against corruption because we are scrutinised every six months by the World Bank, the IMF (International Monetary Fund) and the donor countries.

"Every year we also have a donors conference and every dollar is accounted (for)."

Since the bloody 1999 independence referendum, the nation of 1 million people has received generous international assistance, including a $150million commitment from the Howard Government.

In the 95-page report, the World Bank warned that corruption was likely to erode the benefits of the billions of dollars that would flow from East Timor's oil and gas fields.

Mr Ramos Horta, who addressed the four-day Engaging Communities conference yesterday, said the biggest hurdle in tackling corruption was staffing the judicial system.